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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: CalculatedRisk who wrote (24999)	3/5/2005 10:23:14 PM
From: mishedlo	Respond to of 116555

STRONG EMPLOYMENT NUMBERS PORTEND WORSENING ECONOMIC IMBALANCES by Peter Schiff Euro Pacific Capital March 4, 2005 As crazy as this may sound, not all employment is good employment. Today's labor department release of a larger than expected 262,000 increase in February non-farm payrolls, heralded by Wall Street as evidence of a vibrant U.S. economy, actually confirms the reverse: a dangerously imbalanced economy moving further off kilter. The over-bloated service sector added another 207,000 jobs, with construction, no doubt mostly residential, adding 30,000. The beleaguered manufacturing sector did manage to add 20,000 jobs for a change, though half of that gain resulted from temporarily laid off auto workers returning to their job. In other words, the wealth producing sector of the economy added few workers, while the wealth consuming sector provided over 80% of new jobs. The basic problem with service sector jobs is that they produce few tradable goods. As a result, the added incomes associated with such jobs create upward pressure on our nation's trade deficit, as service sector workers use their additional incomes to buy more imported products. In addition, such jobs provide more workers with the means to qualify for home mortgages, which require additional borrowing from abroad, and provide the basis for future cash-out refinancing, requiring still more foreign financing and resulting in additional purchases of imported products. read the rest here: financialsense.com